This paper examines the challenge of defining poverty and how the absence of a shared definition undermines global efforts to eradicate it. Drawing on approaches used by the World Bank, UNESCO, and national governments, the paper analyzes how each agency's philosophical and political orientation shapes its measure of poverty and, in turn, its policy responses. The paper argues that without a common definition, organizations cannot agree on the scope of the problem, coordinate resources effectively, or establish meaningful benchmarks for progress. It concludes that ideological fragmentation and the lack of coordinated measurement represent a significant structural barrier to meaningful poverty reduction worldwide.
The elimination of poverty is an objective shared by governments, supragovernmental organizations, and non-governmental organizations (NGOs) alike. Even though the elimination of poverty was one of the principles on which the current international system was founded in the wake of World War Two, poverty persists in many parts of the world. The different bodies that have sought to eliminate or alleviate poverty are faced with significant challenges, but those challenges actually begin at the most fundamental level: the agencies themselves do not share any common definition of poverty with which to work. This paper examines the different definitions of poverty, why they exist, and how they affect — and hinder — the ability of different agencies to effectively address the poverty problem.
The World Bank is one of the leading global bodies in the fight against poverty, providing financing for developing nations, often during difficult economic times. The World Bank's philosophy for defining poverty is outlined on its website. The organization has decided that the first step in eradicating poverty is to measure it effectively. That process involves three components: first, defining the relevant welfare measure; second, defining a poverty line below which one is said to exist in a state of poverty; and third, selecting an indicator used for reporting on either a population as a whole or some sub-population. The World Bank therefore uses different measures for different nations, based on a combination of their level of wealth relative to their cost of living. Much of the World Bank's work is grounded in The Handbook on Poverty and Inequality by Haughton and Khandker (World Bank, 2011).
The World Bank also focuses on poverty mapping, which helps it to narrow down areas of focus within a country. Specific geographic regions or communities face more poverty than others within a given country, and the World Bank seeks to identify those groups in order to direct its aid efforts to those most in need. The Bank also uses sophisticated data collection techniques, including a multitude of proprietary surveys, publicly available data, and other assessment methods.
This fine-tuned approach to defining poverty allows the World Bank to target its resources to the communities most in need, which is the Bank's preferred approach. Because the World Bank often funds projects at the community level, this strategy fits well with its mandate. However, the approach makes it more difficult for the World Bank to reconcile community-level infrastructure projects with broad-based poverty eradication. Small-scale projects backed by high-priced infrastructure also run the risk of delivering results that cannot keep pace with population increases.
UNESCO has reached the conclusion that social capital is one of the most important elements in the eradication of poverty, and its underlying philosophy differs considerably from that of the World Bank. UNESCO sees a life free from poverty as a human right, and from this underlying philosophy it follows that the organization must adopt a definition of poverty that all individuals can conceivably transcend, regardless of how many people exist or what inputs they might contribute to their own well-being. Unfortunately, while UNESCO asserts that social capital is a critical element in overcoming poverty, the best definition it can offer for social capital is "it is not what you know, it is whom you know" (Fournier, 2002). By this understanding, social capital exists in relations between individuals — a definition that does not lend itself to clarity, quantification, or even a consistent understanding of poverty over time. Ultimately, UNESCO understands poverty as a symptom of multiple problems — economic, social, cultural, and political — and therefore holds that eradicating poverty must address each of these problems for each nation and sub-national group. One can see how this task quickly becomes enormously complex. There is no set measure for poverty, and the solution requires completely overhauling the social, political, and economic systems not only of regions affected by poverty but of the entire world. Oyen (2002) makes the further point that the wildly differing definitions of social capital render the concept more or less unmanageable for anyone trying to leverage it to eradicate poverty, even as it has come into vogue.
Boltvinik (no date) outlines additional methodologies for measuring poverty. He argues that the first level on which measures are differentiated is whether or not they rely entirely on monetary indicators. Non-monetary approaches treat poverty as a matter of well-being rather than wealth — a completely different philosophical starting point. He contends that at a fundamental level poverty is related to being in a state of want, and that want is tied to the necessities of life. This still produces all manner of measurement problems. There is significant disagreement, he notes, about how to define the cutoff point even when quantitative measures have been established. Even a simple income-based model must take into account subjective factors such as what people actually need and want. The poverty line methodology is used by many organizations, but each group determines where that line falls according to its own method, leading to substantial debate about the poverty status of large segments of a given country's population. All but the most extreme cases could be excluded from "poverty" simply by making a small shift in the definition. As Boltvinik observes, the placement of the poverty line is often arbitrary and can be determined by political needs or interests.
For example, the UNDP has a strongly political orientation in its assessment of poverty, blaming globalization for failing to lift every single person out of the poverty they experienced before the concept of globalization was even conceived (Veltmeyer, 2010). All organizations carry some political stance, and as a result there is no universal definition of the poverty line.
There are yet further definitions of poverty — such as wealth disparity within a nation, where one's poverty is understood to be at least partly defined by what the richest members of a society possess (IDEAs, 2009). Arguably, however, such an understanding redefines the word. Inequality means inequality, and that is not the same concept as poverty. A society in which everyone lacks access to the necessities of life is not the objective of any reasonable agency.
In the United States, poverty is measured on the basis of a poverty line derived from a basket of goods. Such simplified definitions are used primarily to determine eligibility for social programs (Willis, 2005), and are not necessarily designed for the purpose of actually eliminating poverty but rather for providing a very basic level of social welfare. This raises a key point about the relationship between the definition of poverty and the inability of agencies and governments to eliminate it: the different bodies that define poverty, however they do so, have different intended outcomes associated with that definition, and some definitions are not aligned with poverty eradication strategies at all.
This is the case internationally as well. The different agencies carry different perspectives on what they want to accomplish, and their definitions of poverty appear closely related to their desired outcomes. In the United States, poverty is defined in a way that provides a basic level of social welfare, designed to include only those in the most desperate need. This allows governmental organizations to avoid financing comprehensive poverty eradication strategies. Even though they have a means of measuring poverty, they are not acting to eradicate it — there is no particular interest on the part of the defining agency in bringing the number of aid recipients down to zero.
This contrasts with organizations like UNESCO and the World Bank, both of which would prefer to see the elimination of all poverty. The approaches of these two bodies offer a useful case study in why differing definitions of poverty create problems for elimination efforts. In order for poverty to be eliminated, we need not only to define it but to understand its underlying causes. The World Bank and UNESCO take completely different approaches on both fronts. The World Bank's understanding is that poverty relates to infrastructure and equality of opportunity; its poverty measures therefore emphasize access to food, clean water, medical care, and education, along with economic indicators. These measures allow the World Bank to finance projects that improve infrastructure in areas where it is lacking. The impact of these projects on poverty is then incorporated into assessments when the poverty of a region is evaluated again. However, because the link between infrastructure improvements and better economic outcomes can span many years, it is not easy to draw specific conclusions about World Bank activity and poverty levels in any given region — and many other factors can obscure the impact of the Bank's actions.
UNESCO's perspective is less linear in its logic. Armed with a vague and shifting understanding of the antecedents of poverty, UNESCO has trouble not only measuring poverty but also drawing clear links between specific program actions and poverty reduction. The organization understands in broad strokes how poverty persists — or more accurately, why it fails to be eradicated — but seems unable to translate this understanding into policy with the clarity that the World Bank has achieved.
"Fragmented definitions prevent coordinated policy and benchmarks"
"Lack of coordination reduces efficiency of anti-poverty efforts"
It is impossible to address a multi-faceted issue like poverty in an ad hoc manner. Yet that is precisely what is happening today, and it is one reason why poverty persists. Other factors — rapidly growing populations and poor governance, for instance — also play important roles, but the lack of coordination among groups that are nominally oriented toward the same objective is another significant contributing factor. We might not be able to eliminate poverty even with more coordinated work based on a common agreed-upon definition and set of measures, but progress would likely be further along had such a common framework existed. The absence of a common definition of poverty means the absence of common measures of poverty. This means that the efforts of each group are driven by measures that are not only uncoordinated with those of other groups but may not even be conceptually congruent. As a result, those efforts are inefficient, and that inefficiency draws a clear connection between the lack of a common definition and measure of poverty and our collective inability to address poverty in any meaningful way over the past sixty years.
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